"The time has come for us to have our own finance company to fund Volvo vehicles as we have reached a critical mass of commercial vehicles, which include trucks, buses and construction equipment. It will be a fully owned subsidiary of Volvo and extend finance to Volvo customers," he said.
Announcing the completion of 10 years of Volvo's presence in India, Leblanc said the finance company would see an investment of at least $50 million. It is appropriate for the company to have its own finance company at a juncture when it is looking at growing the commercial vehicle market in the country.
Its new joint venture with Eicher Motors, VE Commercial Vehicle, will help the company increase its presence in the commercial vehicle market in the country, he said.
The company is looking at selling 100,000 vehicles in India by 2015 and capturing 10-15 per cent of the total commercial vehicle market, Leblanc said. This will be achieved by both VECL and Volvo India together. Volvo India has sold 5,000 trucks and 2,000 buses in India since inception in 1998.
In the first five months of 2008, Volvo sold 450 trucks and has an order book of another 450 buses as of June 2008. Volvo has also sold 100 buses in the same period and has an order book of 350 buses for 2008. Volvo India has a capacity to produce 2,500 buses and trucks at its Bangalore plant.
The company is currently adding more assembly lines to gradually increase the production capacity, Leblanc added.
